ISLAMABAD/KARACHI: Ministry of Finance, Economic Affairs, Statistics and Revenue on Tuesday issued a notification allowing the import of vintage and classic cars and jeeps manufactured before January 01, 1968, at a flat rate of $5,000 irrespective of engine capacity.
As per the SRO 833 (1)/2018 of Ministry of Finance, Economic Affairs, Statistics and Revenue, a copy of which is available with Pakistan Today, the Federal Government has exempted vintage or classic cars and jeeps from all kinds of taxes including customs duty, regulatory duty, additional customs duty, federal excise duty, sales tax and withholding tax in favour of a cumulative amount of $5000 per unit.
The Federal Board of Revenue (FBR) in the notification explained that vintage or classic cars and jeeps mean old and used automotive vehicles, falling under PCT Code 87.03 of the First Schedule to the Customs Act, 1969, manufactured prior to January 01, 1968.
Earlier, the then PML-N led government in Budget 2018-19 proposed concessionary import of vintage and classic cars and jeeps at fixed duty and tax of $ 5,000 but was later withdrawn on the recommendation of Senate Standing Committee on Finance.
Under the proposed rules taxation will not vary according to the engine capacity of the car but will be imported at a fixed rate of $5,000 per unit.
According to senior officials, antique cars, not exceeding 5000cc, would be imported at a fixed rate and would be reconditioned in Pakistan. Moreover, the notification does not clarify whether such vintage vehicles would be imported under baggage scheme or through direct import.
It is pertinent to mention that this is the first of its kind initiative taken by the government to aid the auto industry and prior to this notification import of cars older than three years was prohibited and a heavy levy was charged on vehicles exceeding 1300cc grade.
According to sources, if the ministry gives a green signal then it would indeed serve as a step for the creation of a whole new industry in Pakistan, where imported vehicles could be reconditioned and sold on for a profit.
Although experts term this as a progressive step for the auto sector, however, some argue that this would only worsen the already degrading balance of trade and increase luxury imports.